Drawing upon decades of experience, RAND provides research services, systematic analysis, and innovative thinking to a global clientele that includes government agencies, foundations, and private-sector firms.

The Pardee RAND Graduate School (PRGS.edu) is the largest public policy Ph.D. program in the nation and the only program based at an independent public policy research organization—the RAND Corporation.

Download Free Electronic Document

The United States’ demand for illicit drugs creates markets for Mexican drug trafficking organizations (DTOs) and helps foster violence in Mexico. Some government and media sources have reported that Mexican and Colombian DTOs combined earn $18–$39 billion annually in wholesale drug proceeds and 60 percent of all Mexican DTO drug export revenue comes from marijuana. These numbers have been cited to argue that legalizing marijuana in California would reduce Mexican DTOs’ revenues, thereby reducing violence.

In a new study funded by RAND International Programs, RAND researchers assessed how marijuana legalization in California might influence DTO revenues and the violence in Mexico.

Key study highlights include the following:

Contrary to some government and media estimates, Mexican DTOs’ annual gross revenues from illegally exporting marijuana and selling it to wholesalers in the United States are likely less than $2 billion; the study authors’ preferred estimate is $1.5 billion.

The claim that 60 percent of Mexican DTO gross drug export revenues comes from marijuana is not credible. There is no public documentation about how this figure is derived, and government analyses reveal great uncertainty. RAND’s exploratory analysis on this point suggests that 15–26 percent is a more credible range.

California accounts for about 14 percent of U.S. marijuana consumption, and domestic production is already prominent in California. Thus, if marijuana legalization in California affects only revenues from supplying marijuana to California, Mexican DTO drug export revenue losses would be very small, perhaps 2–4 percent.

The only way that legalizing marijuana in California could significantly influence DTO revenues and the related violence is if California-produced marijuana were smuggled to other states at prices that outcompete current Mexican supplies. In this scenario, legalizing marijuana in California could undercut sales of Mexican marijuana in much of the nation, cutting DTOs’ marijuana export revenues by more than 65 percent and probably by 85 percent or more. As such, Mexican DTOs would lose approximately 20 percent of their total drug export revenues.

But the extent of such smuggling would depend on many factors, including the response of the U.S. federal government, the actions of other states, and the taxes and other regulations imposed on marijuana sales in California.

It is unclear whether reductions in Mexican DTOs’ revenues from exporting marijuana would lead to corresponding decreases in violence. Some mechanisms suggest that large reductions in revenues could increase violence in the short run and decrease it in the long run.

Research conducted by

This report is part of the RAND Corporation research brief series. RAND research briefs present policy-oriented summaries of individual published, peer-reviewed documents or of a body of published work.

This research in the public interest was supported by RAND, using discretionary funds made possible by the generosity of RAND's donors, the fees earned on client-funded research, and independent research and development (IR&D) funds provided by the Department of Defense.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.

The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest.